Expatriation – old issues, new insights

Citation

Selmer, J. and Suutari, V. (2011), "Expatriation – old issues, new insights", Cross Cultural Management: An International Journal, Vol. 18 No. 2. https://doi.org/10.1108/ccm.2011.13618baa.001

Expatriation – old issues, new insights

Article Type: Guest editorial From: Cross Cultural Management: An International Journal, Volume 18, Issue 2

The practice of using expatriate managers is very old. In historic times, the ruler of empires placed the government of faraway places in the hands of trustworthy subordinates. This was practiced in ancient Rome. For example, Julius Caesar was for two consecutive terms the Governor of Gaul (modern day France, Belgium, Luxembourg, and Western Germany) (Freeman, 2008). This practise was also applied later by the British in India and elsewhere (Stening, 1994). That custom was adopted by international business firms and subsequently, many foreign subsidiaries of multinational corporations (MNCs) were headed by expatriates. However, just a few years ago, it was not uncommon to hear among practitioners and scholars alike that the use of expatriates was a thing of the past, to the extent that they almost were regarded as an anachronism. In fact, there was a belief that expatriates in foreign subsidiaries of MNCs all over the world would soon be replaced by qualified locals. However, these expectations were not founded on empirical facts. Although the recent economic world recession may have temporarily restricted the development, pre-crisis surveys have consistently found that the use expatriates are increasing, not decreasing (GMAC/GRS, 2008; Mercer HRC, 2006, PriceWaterhouseCoopers, 2005). Hence, there is no risk that academic research on expatriation will vanish any time soon due to disappearing individuals to study.

Instead, new insights of investigation have emerged within the academic field of expatriation. This field of study has had a rapid and impressive development where old topics are seen from new perspectives and through such re-focussing, completely new insights are discovered and explored. This has been fuelled, not at least, by a new generation of scholars entering the ranks while many of the established researchers are still active. That has proven to be a very forceful driver of expatriation research. Consequently, this special issue of Cross-Cultural Management: An International Journal features senior as well as junior researchers to empirically explore familiar issues in a novel way to gain new insights in expatriation research. The articles here are selected and developed from the more than 30 papers submitted to the Expatriate Management Track at the 10th EURAM Annual Conference in Rome. Topics covered include staffing policy for foreign subsidiaries, female expatriates, expatriates’ work adjustment in emerging markets, roles of expatriates’ spouses among dual-career couples, marital status and work outcomes of self-initiated expatriates, a total reward perspective on expatriates’ affective commitment and what compensation packages expatriates prefer.

The study by Naoki Ando investigates a timeless practical problem in a different way; how foreign subsidiaries decide how to staff their organizations. He applies a sociological view to explain foreign subsidiary staffing decisions, analyzing a sample of almost 2,000 foreign subsidiaries of Japanese manufacturers in 40 countries, he finds that the ratio of parent country nationals (PCNs) to total employees (PCN ratio) of foreign subsidiaries is positively associated with the average PCN ratio of its parent firm and the average PCN ratio of Japanese firms operating in the same host country and the same industry. He also finds that the positive relationship between the PCN ratio adopted by other Japanese firms and the PCN ratio of foreign subsidiaries is moderated by the international experience of the parent firm, such that the positive relationship is weaker as the parent firm accumulates international experience. These results indicate that both internal and external institutional pressures significantly may affect decisions on PCN assignments to foreign subsidiaries. The study also demonstrates that sociological perspectives could enhance our understanding of foreign subsidiary management.

The article by Nina Cole and Yvonne McNulty deals with female expatriates but with a twist. As opposed to most scholarly contributions, it sets out to assess potential explanations for the better interactional and work adjustment of female expatriates compared to males discovered by previous research. Based on the relevance of the personal value called self-transcendence, they find that this value predicted interactional and work adjustment. However, possibly due to the small sample size, the only gender disparity found was higher perceived expatriate-local difference in self-transcendence by the female expatriates. Although the findings indicate that human resource managers may benefit from knowing the self-transcendence values of expatriate candidates to make more effective selection decisions, the results also suggest that additional research regarding gender differences therein appears warranted.

Markus G. Kittler, David Rygl, Alex Mackinnon and Katja Wiedemann similarly features a relatively well-researched area, but in a new geographic and political context. They explore work roles and how they influence work adjustment of German expatriates in Central and Eastern Europe and Russia. Perhaps, due to the less well-understood context, the results both confirm but also challenge part of the conventionally assumed association between work roles and work adjustment of expatriates. As predicted, work adjustment had a strong negative association with role conflict and a positive relationship with role clarity. However, unexpectedly, work adjustment had neither any association with role flexibility nor with role novelty. These findings may imply that companies from developed countries sending managers on assignments in CEE countries and Russia have to be more aware of potential conflicts that could arise. Hence, the findings highlight the developed versus developing country institutional and demographic differences between parent and the host countries.

The paper by Liisa Mäkelä, Marja Känsälä and Vesa Suutari also deals with a topic that is familiar but focuses on a novel issue; how dual career expatriates view their spouses’ roles during international assignments. Not surprisingly, they find that the importance of spousal support generally increases among dual-career couples during international assignments. The authors identify six such spousal roles; supporting, flexible, determining, instrumental, restricting and equal partner, and that spouses were typically described as performing more than one of these roles. The results underscores the importance of treating spouses as an important resource and that they should be involved as such in training and preparation of dual-career couples. There may also be a need for corporate programs to support dual-career couples during expatriation.

Studying the under-researched group of self-initiated expatriates, Jan Selmer and Jakob Lauring examine whether gender could have a moderating effect on the frequently observed positive relationship among expatriates between being married and work outcomes. Although this positive association of marriage was found, both with work efficiency and work performance, there was no moderating effect of gender on these positive relationships. The latter findings contradict conventional arguments that male spouses would feel more stress and receive less corporate support leading to worse work outcomes by the expatriate compared to women spouses. The authors speculate that this unanticipated finding may have something to do with the type of expatriates investigated, since self-initiated expatriates may have more latitude than others to decide a suitable host location to fit both the expatriate and the spouse, regardless of their gender. The findings call for more research on expatriate gender roles as well as direct comparisons between different groups of expatriates.

Yet again, the article by Christelle Tornikoski applies a proverbial reward perspective to examine something new; whether organizations can encourage the loyalty of their international employees through the composition of their expatriate packages. She finds that a positive state of the psychological contract relating to tangible universal rewards (traditional compensation packages) is not associated with an increase in the overall affective commitment of expatriates. On the other hand, a very strong positive relationship was found between expatriates’ state of the psychological contract relating to total rewards (including intangible particularistic rewards, such as, for example, opportunities for higher professional status, good working conditions, a meaningful role, a wide scope of responsibilities and a strategic role in the organization) and affective commitment. The findings suggest that organizations may enhance the loyalty of their expatriates and thereby perhaps increase the retention of these valuable international employees through the exchange of intangible particularistic rewards.

The final article, by Doris Warneke and Martin Schneider, also focuses on compensation, but propose a new technique to develop expatriate compensation packages. They present a framework based on utility theory and apply conjoint measuring techniques. It is argued that employees derive utility from the multiple characteristics of the assignment in terms of working conditions, career prospects and living conditions, perceiving that utility relative to their country-specific status quo. The authors then propose conjoint analysis to measure such preferences and present an illustrative case study to illustrate this technique. The findings from that study indicate that an employer may propose a few default compensation packages adapted according to home and host country. This approach may be more effective than the popular “cafeteria approach” where expatriates are asked to assemble a compensation package according to their own preferences within certain restrictions. The paper demonstrates that conjoint analysis may be an appropriate technique to handle expatriate compensation packages of multiple characteristics with possible tradeoffs.

Last, but not least, we would like to thank the contributing authors for enduring a long and rigorous process in developing this special issue on contemporary expatriation research. The articles herein may serve as a vibrant proof that the future of this field of study is bright and promising.

Jan Selmer, Vesa SuutariGuest Editors